Is Efficiency Dead? Passive House and the Clean Energy Revolution

Despite the best efforts of the fossil fuel industry and its friends in the White House, the clean energy revolution is upon us and gathering steam. It’s exciting stuff: a steady drumbeat of tech breakthroughs, record-breaking deployment rates, and free-falling prices. We’re entering a time of exponential change and smashed assumptions about our energy system, our energy consumption, and the prospects for solutions to the global climate crisis. 

But as this clean energy revolution unfolds, what does it mean for energy efficiency in our buildings? If it becomes cheaper to slap solar panels onto a building than to insulate and air seal it, does Passive House even make sense as a climate action strategy? Should we ditch energy efficiency for clean energy?

This binary, either/or view of clean energy versus efficiency presents a false dichotomy. In fact, building energy efficiency has never been more relevant than it is today. Let’s take a look at why, as viewed through a series of lenses.

THE WIDE ANGLE LENS

While, in many ways, the climate crisis is wickedly complex, climate math is pretty simple, at least as it relates to energy. As described by the “Kaya Identity” developed by Japanese economist Yoichi Kaya, carbon emissions is a product of four factors: population, gross domestic product (GDP) per capita, energy intensity of the economy (per unit of GDP), and carbon intensity of that energy (emissions per unit of energy consumed). 

We know that to reach the goals of the Paris agreement (limiting warming to well below 2° C), global carbon emissions need to peak by 2020 and then reduce by 50% by 2030, reduce by another 50% by 2040, and then another 50% by 2050, and so on. No small task. 

We also know that global population will rise in coming decades, likely to somewhere north of 9 billion people. We hope, if we care about economic justice, that GDP per capita will increase as hundreds of millions of people around the world rise out of poverty. So, the first two factors in our emissions math will be increasing, not decreasing. That puts a lot of pressure on the latter two factors, energy intensity and carbon intensity. Eventually, one of these factors will need to hit zero in order for emissions to zero-out, and the only factor for which that is technically possible is carbon intensity. But we don’t have a lot of time to wait for that to happen. We need to see both energy intensity and carbon intensity decrease rapidly if we are to have any hope of slashing emissions by 50% per decade. We need to deploy deep energy efficiency and renewable energy wherever we can, as soon as we can. We need Passive House buildings all over the place, and solar panels covering them.

Morningside Passive House
Morningside Crossing, designed by NK Architects and Thoughtful Balance for AM Rodriguez, combines an ambitious Passive House retrofit and new wing to create affordable housing for seniors. From left to right: new Passive House wing, retrofit of 1897 elementary school, and retrofit of 1929 school addition.

Research findings from the Grantham Institute of Imperial College London, Carbon Tracker Initiative, DNV GL—a global assurance and risk management company—and the Energy Transitions Commission all concur: there is tremendous potential for clean energy to propel us toward our Paris climate goals, but without deep energy efficiency in our buildings we will likely miss the mark. 

When it comes to clean energy and Passive House, it’s not either/or, it’s both.

THE POSITIVE CASH FLOW LENS

Let’s zoom in from the macro scale to the micro: the individual building site, and get right to the critique that practically every Passive House practitioner has heard. In the binary view of renewables versus efficiency, the argument against efficiency is that it’s too expensive. Never mind that, according to the independent think tank Pembina Institute, the average construction cost premium of Passive House projects is 6%, or that data from the Pennsylvania Housing Finance Agency suggest that this premium could be as low as 2% for multifamily buildings. With upfront costs as low as 2-6%, ongoing utility bill savings can offset the bigger mortgage or construction loan required to fund Passive House construction. Passive House can be cash-flow positive from day one of occupancy.

Moreover, policy mechanisms like PACE (property assessed clean energy) financing can eliminate the split incentive problem. A building owner can invest in Passive House performance, and the debt service for that investment remains with the property itself. Future buyers enjoy the benefits of Passive House and take on the loan payments–again, all cash flow positive. Why not make the investment, create a better building, and enjoy positive cash flow? You can do the same with solar panels, if you like.

When it comes to positive cash flow and Passive House, it’s not either/or, it’s both.

THE “NET ZERO” SITE LENS

A popular way of thinking about buildings and climate change is through a “net zero” lens. Over the course of a year, you generate as much renewable energy onsite as your building consumes, on a net basis. In the summer, your building is a net producer, and in the winter it’s a net consumer. So, can you just ignore building efficiency, install a bunch of solar panels, and call it good? Well, no, actually, for a couple of reasons.

In northern settings, and particularly in northern urban settings where both space and solar access is limited, the quick and powerful argument for energy efficiency in net zero projects is "real estate." There simply is not enough roof area on a typical two-story home in Seattle, for example, to achieve net zero energy performance without Passive House levels of efficiency. The same is true for multifamily buildings in Seattle: the only route to a four-story net zero apartment is deep energy efficiency. 

If, however, your building is in suburban California where both space for onsite solar panels and insolation for those panels is plentiful, deep efficiency may not be necessary in your net zero energy math. You might think you can get away with a pretty mediocre building and make up the difference with cheap solar panels. Not so fast. Watch out for the “Duck Curve.”

Graham Irwin of Essential Habitat in Fairfax, California was among the first in the Passive House community to write about the Duck Curve, a daily dynamic in California energy markets that net zero energy buildings might worsen. Happily, so much solar energy is being deployed in California that demand for non-solar energy during the sunniest part of the day is approaching, sometimes even reaching, zero. (This dip in demand is the belly of the “duck.”) The problem is that in early evening, just as people arrive home and power up their houses and HVAC systems, the sun goes down and all that solar energy disappears from the grid. This 1-2 punch of the drop in solar energy and spike in home energy consumption causes demand for non-solar energy to ramp up extremely rapidly. (This spike in demand is the neck of the “duck.”)

Carbon-intensive “peaker plants” have to kick-in to supply this evening energy demand, negating much of the emissions benefit of those rooftop solar systems. But Passive House design turns your building into a virtual “thermal battery,” maintaining even interior temperatures throughout day and night with almost zero energy input. If more buildings in California were Passive House, fewer households would be powering up their HVAC systems in early evening and that spike in demand for dirty energy would flatten out the neck of the “duck” every day. As more utility-scale battery storage facilities come online, and as behind-the-meter home battery storage becomes cheaper, that further flattens the “duck” problem.

When it comes to rooftop solar and Passive House, it’s not either/or, it’s both.

THE SEASONAL LENS

As exciting as batteries are for both grid and home energy storage on a daily basis, they are ill-equipped to deal with the seasonal intermittency of solar energy. One of the trickier clean energy puzzles that humanity will need to tackle is how to power northern climates during the winter. Part of the solution will be more widely-interconnected energy grids, so that southern sun can provide northern supply. Part of the solution will be wind and hydro. Another part of the solution will be power-to-gas, where excess solar energy produced midday is used to split water into hydrogen and oxygen, and that hydrogen is stored as fuel. But another key part of the solution lies in our buildings, because the thermal battery of deeply energy-efficient buildings is perfectly suited for seasonal storage. By dramatically reducing winter heating load, Passive House buildings could play a starring role in solving the northern winter load conundrum.

When it comes to a clean winter grid and Passive House, it’s not either/or, it’s both.

EFFICIENCY IS THE ULTIMATE DISTRIBUTED ENERGY RESOURCE

The core reason that deep energy efficiency is likely to remain centrally important to both the clean energy transition and to global climate action is that it is the ultimate distributed energy resource (DER). Not only can you deploy energy efficiency virtually anywhere, it also performs best exactly when it is most needed: during peak demand. Energy efficiency flattens out the peaks and valleys of demand, both on a daily and a seasonal basis, making it more practical to fill in the gaps with renewable energy, battery storage, and demand response.

And despite the remarkable cost reductions of clean energy, energy efficiency is still the cheapest energy investment around; it's the "First Fuel." 

Passive House is not only still relevant in these early days of the clean energy revolution, it will support the revolution’s future success.

[Editor's Note: this article will be published in the next issue of Passive House Buildings, edited by Mary James of Low Carbon Productions.]